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There was a time when these mainstays of the investment community could safely park their money in bonds issued by companies, receive fairly dependable income, and abide by some simple axioms. For peace of mind, buy high-grade bonds. For a little more yield—and risk—take a gamble on junk bonds. Find some able fund stewards, mind the general health of the economy, and don't lose too much sleep over your investments.

Things are different now. In its effort to breathe life into risky assets, the Fed has pushed Treasury investors into high-grade corporates and crowded high-grade investors (along with just about everybody else) into high yield. Prices have hit historic highs, yields have hit all-time lows.

Bond investors may grumble, but with income so scarce anywhere, they keep lining up for corporate bonds, and this year has already produced record corporate issuance. As new bonds enter the market with lower coupons, that market becomes more susceptible to certain risks.

For one thing, falling interest rates motivate issuers to refinance existing bonds, when possible, by calling them at a pre-determined price before their due date. This can limit gains for existing bonds that could get redeemed below their market prices. For example, many high-yield bonds are callable at 103 cents on the dollar, and the whole high-yield market now trades at an average price of 103.25 cents.

Last week, strategists at Citi set out to gauge how historically low coupons are affecting potential price performance for new bonds against the backdrop of a likely eventual rise in Treasury rates. Citi created two hypothetical 10-year bonds, one with a 5% coupon and the other a 10%. Both are issued at par value and are callable after five years at par plus half the coupon rate.

The 5% bond is more sensitive to Treasury-rate movements. If bonds rally, Citi said, that combination of greater sensitivity and lower call-price protection causes the lower-coupon bond to outperform at first, but caps its upside sooner. If rates and yields rise, it hurts the lower-coupon bond more.

Such interest-rate sensitivity is even more heightened for high-grade bonds in general, and is especially elevated now. "While interest rates are likely to stay low in the near term, unexpected rises in economic growth or inflation could cause rates to reverse rapidly and have a potentially large negative impact on investment-grade bonds even if defaults remain low," wrote strategists at Neuberger Berman last week.

Given the strength of their balance sheets, corporate bonds should remain resilient from a credit standpoint, Neuberger Berman says, noting that it's still "relatively positive" on high yield but less sanguine on investment-grade bonds owing to their low yield and rising sensitivity to Treasury rates. Corporate bonds could still see more gains, but as yields keep falling, returns will likely be less impressive in the coming year.

They're not rising yet, but Treasury yields continue to exhibit heightened sensitivity to fiscal-cliff negotiations, with some small intraday moves last week coinciding with the latest updates coming out of D.C. The 10-year Treasury note yield dipped to 1.613% on Friday, down from 1.693% a week earlier, while the 30-year bond's yield fell to 2.806% from 2.829%.